Lawmakers respond to revenue forecast

State economic forecasters delivered a cautiously optimistic message to lawmakers on Wednesday, predicting the state will see a net gain in projected tax revenues.

State economist Steve Lerch said the state can expect an additional $59 million in revenue for the current biennium and a decrease of $19 million for the next two-year budget cycle. It all adds up to an extra $40 million for lawmakers to work with. (Read the full forecast here).

The long-awaited announcement from the Economic and Revenue Forecast Council provides a starting point for lawmakers as they prepare to negotiate budget proposals in the second half of the legislative session.

The Legislature still faces a $1.3 billion deficit or more in current operations and that does not count a court-ordered increase in education funding. Some say that could cost another $1 billion. State revenues from sources like the retail sales tax are still growing, Lerch said, but cautioned that a number of market factors remain volatile.

Here are responses to today’s announcement from key lawmakers:

Rep. Ross Hunter (D-Medina): “From my point of view we have a hard problem to resolve and this doesn’t make it worse.”

Sen. Andy Hill (R-Redmond): “The nice thing about this is now we can move forward and finalize the budget. We have been working on various scenarios, whether it was good or bad. Now we can start making hard decisions and buttoning things up.”

Sen. Jim Hargrove (D-Hoquiam): “I think the biggest problem here will be meeting everybody’s expectations now that the tough times are over and we don’t have to make as many cut or we don’t have to come up with as many solutions. This really isn’t that big of change from what were dealing with and in fact is still worse than when we started session.”

Rep. Terry Nealy (R-Dayton): “In the big picture it doesn’t change a whole lot. We are still obviously in a deficit situation and so a budget is going to have to take that into effect. I am cautiously optimistic with today’s news – at least maybe slowly we are coming out of the recession and it is positive looking ahead. Out there in the employment world and business world, those employers are still being very cautious until we see more positive results and I think they are concerned about an increase in taxes and so I think that’s going to keep things on a slow keel coming out of this recession. There is still going to be concern over what this budget is going to look like.”

Hill said the Senate will release its budget in five to ten days, with the House plan coming a week or so later.

Gov. Jay Inlsee‘s budget priorities and a list of proposals to close so-called tax loopholes will be coming near the end of next week, said budget director David Schumacher.

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The Capitol Record is TVW's blog about state government. TVW is a non-profit network modeled after C-SPAN, airing gavel-to-gavel coverage of the state Legislature as well as independently produced shows. For comments or questions, e-mail Christina Salerno.